Newmont posts market-beating profit, sees itself leading world output

FILE PHOTO: A giant Newmont Mining haul truck which is stuck in the mud gets a push from a conventionally sized bulldozer at Newmont's Carlin gold mine operation near Elko,
Thomson Reuters
By Susan Taylor

TORONTO (Reuters) - Newmont Mining Corp reported a better-than-expected quarterly profit on Thursday and maintained a production prediction that would see it take the title of world's largest bullion producer from rival Barrick Gold .

Newmont, which has mines in the Americas, Africa and Australia, said fourth-quarter gold output nudged 1.4 percent higher to 1.34 million ounces, matching Barrick's performance, as prices rose 6.5 percent to $1,270 per ounce.

In the next two years, Colorado-based Newmont sees annual output between 4.9 million and 5.4 million ounces of gold, then between 4.6 million and 5.1 million ounces annually through 2022.

In contrast, Toronto-based Barrick cut its 2018 forecast to between 4.5 million and 5 million ounces of gold, while targeting 4.2 million to 4.6 million ounces of annual production from 2019 to 2022.

"This performance gave us the means to invest in five new projects, raise our dividend by 87 percent, and increase our investment in exploration - an investment that paid off as we added 6.4 million ounces of gold to our reserve base, offsetting depletion for the first time in five years," said Chief Executive Gary Goldberg in a statement.

Newmont, which ended the quarter with $3.3 billion cash on hand, reported adjusted profit of 40 cents per share, above analysts' average forecast of 38 cents a share, according to Thomson Reuters I/B/E/S.

The miner lifted its 2018 capital budget to $1.2 billion to $1.3 billion from a December forecast of $900 million to $1 billion, citing a range of projects.

Earlier this week, Newmont revised its dividend policy with a quarterly payout of 14 cents per share, replacing its previous gold-price linked plan.

On Wednesday, the company reported gold reserves of 68.5 million ounces for 2017, unchanged from 2016, as it replaced reserves through exploration, projects, revisions and acquisitions. Gold resources were up 1 percent, to 48.2 million ounces.

The company also said it plans to spend approximately $230 million on exploration in 2018, earmarking some 39 percent for North America, 20 percent for Australia and the remainder for South America, Africa and other locations.